Historically, parties with good claims but without the financial strength to pursue them have turned to fitigation funding from companies like Woodsford.

Increasingly, we find that businesses with the means to pursue claims are turning to us to reduce the risk involved inherent in any claim, mitigate the detrimental effect of lengthy claims on cash flow and to remove litigation costs from the balance sheet.

We provide a range of funding solutions that remove some or all of the financial risk associated with litigation and arbitration.

We know that pursuing a claim can be a daunting, expensive and lengthy process. Delivering justice for claimants requires strength, resolve, expertise and a detailed understanding of risk.

Our combination of legal and financial expertise, combined with sizeable, secure capital funds (we invest our own money), means we can move quickly to deliver tailored funding solutions that remove some or all of the financial risk associated with litigation or arbitration.

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What are litigation and arbitration funding?

Litigation funding and arbitration funding are ways of redressing the balance of legal claims. Until recently, well-funded defendants were frequently able to outspend their opponents and make the pursuit of justice difficult, risky and, in some cases, impossible. This often meant justice was not pursued, even when a business had an excellent claim.

Litigation funding from Woodsford can bear as much of the cost and risk involved in pursuing justice as you need, enabling sound actions to go ahead when they might otherwise stall.

We can finance some or all of the fees incurred by the claimant’s lawyers. While we do not require that claimant lawyers act on a conditional or contingency fee basis, a lawyer’s willingness to take some risk in the outcome of a case weighs heavily in our decision making.

We can also fund disbursements; these may include costs relating to e-disclosure, expert witnesses, and court or tribunal fees.

Woodsford can finance disbursements in addition to lawyers’ fees, or we can fund only disbursements. It is common, for example, for claimant law firms to work on a 100% conditional or contingent fee basis (i.e. where all of their fees are deferred, payable upon success), in which case the claimant requires only finance for disbursements.

What are the benefits of Litigation Funding?

Clearly, funding provides the necessary capital for large commercial claims to be pursued that otherwise would not, due to either the claimants’ lack of funds or appetite for risk. But Litigation Funding has three other key benefits; it enables a party to hire the best lawyers and experts, receive the benefit of a second set of seasoned eyes, and can significantly improve settlement dynamics.

With funding, parties have enough capital in hand to litigate an issue to conclusion with the best professionals and experts. Litigation funding also functions as a no-cost means of evaluating a party’s claims. Before committing to funding a case or litigation strategy on a non-recourse basis, Woodsford conducts comprehensive underwriting and diligence review.

Woodsford’s in-house underwriters have experience advising clients on litigation strategy and apply this expertise in evaluating the evidentiary and legal strengths of the claim, the financial merits, and the anticipated outcome of various stages of the litigation. This additional review and analysis can greatly improve the overall strategy for parties seeking to vindicate rights and maximize value in court.

And the knowledge that the claimant is fully resourced by an independent, dispassionate and highly selective third-party, sends a clear and powerful message to any defendant. This allows parties to credibly present the strength of their position and their willingness to vigorously pursue their rights in settlement negotiations, in turn facilitating a larger recovery.

What’s in it for Woodsford?

In return for taking on significant financial risk, including adverse-cost risk where relevant, Woodsford receives a pre-negotiated percentage of the damages recovered or a multiple of the costs funded – assuming the case is won. Funding is non-recourse, meaning that if the proceedings fail, we receive nothing and may, as noted above, face liability for the other side’s costs.

Why partner with Woodsford?

Woodsford has a successful twelve-year track record of providing litigation funding solutions for many high value claims.

These funding solutions are the result of our team’s extensive, direct experience of complex disputes, and our understanding of the unique and complex challenges involved in every case. In some instances, we have funded cases which other funders refused to support due to their complex international characteristics.

Our proven expertise, combined with our own capital funding, allows us to move quickly to provide clients with highly flexible, innovative funding solutions. We provide funding on a non-recourse basis and can work with single or portfolios of cases, ensuring the best financial arrangement for both law firms and claimants in each instance.

Woodsford is a founder member of both the International Legal Finance Association and the Association of Litigation Funders.

The types of claims we fund

Investing our own capital gives us the flexibility to invest in all types of claims. There are a number of key claim types that we focus on:

  • Single case funding: Woodsford will consider providing financial solutions for any type of litigation or arbitration, from pre-action to post-judgment. We understand that ‘fee fatigue’ can set in during complex cases, and therefore we are prepared to fund appeal/annulment proceedings, and contentious enforcements.
  • Portfolio funding: We offer portfolio funding arrangements for claimants and lawyers on whom we have been able to carry out enhanced due diligence, for example through previously financed cases. This means that our investment and return may be spread across a portfolio of claims, and litigants and their lawyers benefit from accelerated financing and a lower cost of capital reflecting the lower risk profile of investments made across a portfolio of cases.
  • Appeal & Enforcement Funding. A successful court judgment or arbitral award is often not the end of the process: rather, it can be a staging post along the way to successful recovery. With annulment or other types of appeal process common, contentious and expensive enforcement proceedings are often required. Woodsford offers finance solutions for these late stages of the litigation or arbitration process.
  • Awards monetisation: Following a successful claim, cash flow can become a major issue for law firms and claimants alike as they face further delays in the realisation of any award. Woodsford is able to relieve the pressure on cash flow through a range of finance solutions that deliver cash immediately and mitigate enforcement risk.
  • Adverse Costs Risks & Awards: Adverse costs orders are increasingly prevalent in international litigation, with many jurisdictions following the English model whereby the loser pays some or all of the winner’s legal costs. Claimants must therefore consider how to fund not only their own costs, but also those of the defendant in the event that their litigation is unsuccessful. This contingent risk is significant, particularly in high value cases. We can assume that risk for you, either as part of our case funding solution, or as a self-standing finance solution. This may include a contractual indemnity that we pay the defendant’s cost in the event of an unsuccessful claim, security for costs, or funding for an after-the-event (ATE) insurance premium.
  • Law Firm Finance: An increasing number of firms are seeking law firm finance solutions to help drive business development and growth, and to allow them to move more quickly to support clients. Woodsford has an in-depth understanding of the financing of law firms, particularly those with a substantial amount of claimant litigation and arbitration work. We work with leading law firms to deliver a range of funding options that enable effective cash flow management, as well as managing and mitigating risk.

How do you secure funding for your claim or your portfolio of claims?

Litigation funders such as Woodsford, only fund a small percentage of the opportunities they review – as you can imagine, for us to get comfortable with a 6 or 7 figure investment on a non-recourse basis we need to be confident of a successful recovery. There are 6 key factors that we look at when deciding whether to invest in a claim:

1. The merits of the claim: We carefully review the strength of the claim and the evidentiary support, along with the anticipated defences and counterclaims to predict the probability of the action being successful. The extent of our review will depend largely on the case type, the status of the action, the complexities of the issues involved, the organisation of the diligence materials and litigation counsel’s ability to succinctly articulate its case.

2. The claimant: We will seek to understand the claimant’s motivation for seeking funding, including if the claimant lacks the required resources to bring the claims or desires to shift risk and/or free-up cash flow. The funder will also examine the claimant’s prior litigation history to understand its mindset towards litigation.

3. Claimant’s Legal Representation: The reputation and experience level of the claimant’s counsel is another threshold issue for a case to advance through our initial screening. If we are not familiar with the litigation lawyers (and/or counsel) proposing to prosecute the case, the initial diligence will include a review of the legal team’s experience with the claim type and their track record in similar actions. We will also need to review the firm’s engagement agreement with the claimant to understand the economics of the arrangement and evaluate if the interests of the claimant and its law firm are appropriately aligned.

4. The litigation budget: We provide a fixed commitment of capital to pay for fees and expenses associated with the litigation. Woodsford will review the proposed budget to understand both the types of expenses that are forecasted to be incurred as well as the expected timing of these outlays. And, unless we have included a commitment extension for the facility, it will rely on either the claimant or the law firm to take responsibility for any budget overruns.

5. Expected damages: The size of a potential award will need to be sufficient to provide Woodsford with a return to match the investment risk and cover the cost of running the opportunity through our rigorous diligence and transactional processes. We must be comfortable that if the case is successful, there is likely to be a recovery adequate enough to make for an economically rational investment.

6. Respondent and recovery: We are fully aware that litigation is a two-party affair, with the respondent playing a critical role in how efficiently the litigation will proceed, and whether a sizeable judgment or award will convert into a recovery for the claimant and the funder. The worst-case scenario for a funder (as well as the claimant and a legal team acting on a contingency fee basis alike), is to fund a litigation that proceeds through to trial, ends in a successful verdict with an attractive judgement or award, but the recovery cannot be made because the respondent is insolvent or judgment-proof.

For a more detailed look at the litigation funding process, read out whitepaper, A Practical Guide to Litigation Funding.

Tailored funding solutions

As every claim is unique, it is essential that finance solutions can be tailored to best meet the needs of the stakeholders involved. Funding must work to protect claimants from the risk of escalating costs or adverse results – and must ultimately facilitate the smoothest pursuit of justice.

For more information or to discuss a claim that needs funding, please contact Mitesh Modha

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